So here’s something for you: have you ever wondered how the advertisers make any money when they are essentially handing you X.XX for a zip/e-mail submit? I mean, it’s not as if they’re directly selling the sign-ups anything, so how can they afford to pay an affiliate to send them little more than a zip/e-mail lead? From someone who isn’t familiar with the industry it likely makes little to no sense, but once you dig deeper you begin to realize how it works.
To make it short and sweet (for those who don’t want to read the entire article), the answer is “mailers”. Think of it like this: if I am running a campaign for a free iPhone, for example, that requires a two field sign up (name and e-mail address) I’m likely going to pay somewhere between $1.00 and $2.50 per lead. Thousands of affiliates are going to promote that lead somehow (via PPC, e-mail, co-reg, SEM, etc.) and pump that offer out. That offer might generate 50,000+ names and e-mail addresses, and while I’ve paid $50,000 or more for them, I’m laughing.
Laughing hard.
Where the Value Lies for the Advertiser
That name/e-mail combo might be worth $10 or more to the advertiser even though they’re not selling anything, and even morso if that lead turns around and signs up for some of the offers on the other side of the creative. The conversions for those sign ups are probably 50/50 or so, but the real value comes in the information itself. That advertiser is going to turn around and sell the names/e-mail addresses that they’ve generated via their offer and sell it to as many e-mail management companies as they can, who in turn will then send out e-mails two time or more per day.
The result? Money being exchanged even though nothing was technically “sold” to the person who entered their information. The mailers will then add the name/e-mail to their list and eventually generate some kind of conversion (they hope). The e-mail management company has sold that name/e-mail combo a dozen times, and so the $1.50 that they gave the affiliate to do their work for them has come back in spades. It’s genius, really, and you’d think that anyone could do it if they had the right resources and connections.
The thing is that it’s a lot of work to set up that kind of operation. When you run a “Free iPhone” e-mail or zip submit there actually has to be a way for someone to get the free iPhone. If there is no actual contest the offer itself is violating several North American laws and is a great way to get yourself it all sorts of legal trouble.
Where the Value Lies for the Affiliate
It may seem as if the affiliate is getting the short end of the stick here but the reality couldn’t be further from the truth. While the advertiser may wind up being paid $10 or more for that lead, the responsibility still falls on their shoulders to actually go out and sell it. Make the offer, promote it, and make it feasible. The affiliate, on the other hand, is given an offer that requires very little information in order to qualify and hence experiences incredible conversions.
As an affiliate, when I’m running $0.05 clicks to a $1.80 e-mail submit I’m happy if it costs me $0.50 to make $1.80. The $1.30 profit, replicated 200 times a day, makes for a nice income. I mean, would you refuse to run it now? I know I sure wouldn’t toss away $260 a day.
